Tuesday, January 29, 2008

Personal Asides: Bushs Stimulus Package a Disappointment: Why Did He Do
It? To Keep the Presidency Republican, Naturally: Rising Above
Principle .Ah, Teddy Kennedy Wants to See a Return to Kennedy Camelot
with Obama. Lets See: How Was it Again?

The So-Called Stimulus.

What I want to know is this: why in his final year in government, when he is not running, when he has much to point to for proof of his intransigence against fad politics why has the president proposed a Keynesian stimulus package on the fallacious pretext that it can jump start the economy when there is absolutely no proof that the economy is in troubleand the so-called cure will prompt the government to borrow lavishly providing a higher tax burden on somebody to show phony transfer payments for abjectly political purposes? And why havent the so-called analytical media tried to supply a reason, especially if it is not pretty?

As the Chicago economist Brian Wesbury shows (he won the WSJ prize for guessing to the last decimal point how the economy would do two yars ago), while retail sales fell 0.4% in December and fourth quarter real GDP rose at a sickly 1.5% annual rate, real GDP spurted at 4.9% annually in the third quarter, retail sales topped 1.1% at years end; personal income is up 6.1% and small business earningswhen you deduct income taxes, rent mortgages, car leases and loans, debt service on credit cards and property taxesrose 3.9% higher than inflation. Wesburys models based on monetary and tax policy show the GDP will grow 3% to 3.5%, the probability of recession is at an un-frightening 10%--all of this prior to any Bush fire alarm bells ringing off the hook calling for a stimulus.

Since then the Fed cut interest rates by 175 points there is a strong possibility that there will be a surge in growth in 2008. His most telling argument: What Federal Reserve Chairman Ben Bernanke estimated as a $100 billion loss on sub-prime loans would represent only 0.1% of the $100 trillion in combined assets of all U.S. households and U.S. non-farm, non-financial corporations. Even if losses ballooned to $300 billion, it would represent less than 0.3% of total U.S. assets.

The reason is something that no analyst has yet pronounced. Bush knows far better than this. He is doing it to goose the economy later down the road in mid-2008 and so protect the Republican candidate for president for attacks by the Democrats. He is doing it not for economic reasons but for international ones. He has calculated that either John McCain or Mitt Romney would be infinitely better for the country than either Barack Obama or Hillary Clinton. It shows how seriously Bush views 2008, knowing that the pendulum swing naturally favors the Democrats.

For that reason since the Democrats are committed to withdrawal from Iraq he is ready to rise above economic principle to deliver the political goods to forestall a Democratic triumph such as occurred in 1960 when the economy slumped due to the Feds mismanagement by Arthur Burns enabling Kennedy to devise the slogan Lets get this country moving again. He doesnt want the Democratic nominee to get elected on the basis of the old tried and failed liberal nostrumsarea redevelopment, more urban renewal involving housing, transportation, water, fresh air, space, schools, libraries, hospitalsand win on those issues. So he is willing to apply the old Keynesian nostrum to give us a booster shot to obviate the demagoguery. In essence, goose us with Keynesianism so that we may not have a worse prospect than John McCain or Mitt Romney as president.

Thats why were hearing this nonsense about tax rebates of $600 per individual and $1,200 a couple refundable, meaning they will go to 35 million voters who dont pay income taxes. The last tax rebate happened in 2001 which saw modest growth but did nothing to spur investment or job growth. The big change didnt come until after the 2003 tax cuts. Now the White House seems to have dropped its bid to make the tax cuts permanent in order to accommodate congressional Democrats.

Its all designed to keep the presidency Republican in 2008. Its so important that Bush can afford to compromise his perch with which he can frame the economic debate, deserting his once adamant demand for pro-growth policies, extending the tax cuts and cutting capital gains. The president has surrendered his once solid reputation on which strong economic demands can be based. Now it will be up to Mitt Romney to make the case why it is insufferably bad policy to provide tax rebates to people who dont pay any income taxes. But as to why Bush did it? Consider the prospect of another John F. Kennedy coming to the White House spurred by a wish to emulate what is falsely called the Kennedy Camelot years.

Teddy Kennedy.

Theres at least one more squeeze in the liberal whoopee cushion. Any vague mistiness that Barack Obama evokes for change and hope, stems from the colossal hoax played on the American peoplefrom which they have already awakenedwith the Kennedy delusion. The grimacing old fraud, Ted Kennedy, used the old clichés in referring to Obama yesterday. He is a man of grit and grace. To which David Axelrod who knows hokey political showmanship when he sees it said, I dont think anybody believes that Ted Kennedy would endorse a candidate who wasnt thoroughly committed to the goal of--. Now its universal health care but the same bromide can be used for anything Axelrod needs.

I know hes ready to be president on day one, said Teddy. Just like his big brother who had a term and a half in the Senate, enough to give a little more oomph to the let the word go forth bromide in his inaugural but who was so paralyzed by the failure of the Bay of Pigs invasion launched three months down the road from the inauguration an invasion that failed because JFK suffered a failure of nerve by canceling its air cover, losing 1,100 and forcing this country to humiliatingly pay $53 million in food and medical supplies to barter their release. Such a failure of nerve that continued that he had to have an executive committee peopled by retreads like Dean Acheson run the crisis team for him generating a weakness that led Nikita Khrushchev to believe he could seal off East Berlin from the West without interference (he was right) as Kennedy himself admitted to the journalist Charles Bartlett and emplacing nuclear weapons in Cuba spurring the Cuban Missile crisis, all due to Kennedys immaturity and inexperience and leading the arrogant Kennedy tribe to retain the Mafia to try to rub out Castro.

Ah those lazy, hazy, misty, womanizing, hedonistic, insufferably arrogant, days of Camelot. At least now perhaps we can see why Bush is prepared to jettison anything to forestall the possibility of Kennedy re-treads coming to power. If a phony rebate will do it and if other Keynesians antics would prevent it, I suppose we should gulp hard and accept them.

You're 100 percent right about Bush's motives for the "stimulus package." But it's not the first time he has risen above principle for the sake of his Iraq fiasco. Now he rants against "earmarks" and pork barrel spending, but a few months ago I read an admission by an unnamed administration insider that Bush opened the keys to the Treasury for GOP pork barrelers in Congress as the price necessary to nail down virtually unanimous support for the war.Bill Kurtz

George Bush's "stimulus" money smacks of Communism: From each according to his ability to each according to his need.

And Tom, you think this will help the Republicans? I say not! What they said about Judy now applies to you... "WHAT WAS HE THINKING?"

The voting productive Republicans for the most part will not be getting the money. The Democratic Demographic will be getting a hand out. The Bush Presidency once again has become a complete disgrace to the Republican base.

None of your convoluted justifications will put Humpty Dumpty Bush and the Republicans back up in the base's eyes.

Thanks to the neo-cons, the Republican Establishment has abandoned the core values such as limited government. They have abandoned the base. Even you are marching down the moderation path as you parrot the Weekly Standard and try to force the neo-con square peg into the social conservative round hole.

Tom I never thought I would see you become a victim of clever propaganda. But then it is easier to go along to get along. How sad!

I have made some small contributions to your blog in the past, but I won't visit the comments pages any longer. While I enjoy your writing, most of the comments page is used for two guys to call names to each other.

There are others who comment and their contributions are valuable, but I'll have to miss their good thoughts for fear of running into the other individuals' nastiness.

Thank you for producing your blog and I will continue reading your words every day.

There are rumors that the economic stimulus package will provide rebates to illegal aliens as well as citizens.Should those rebate checks be routed to the public hospitals and schools that provided free services to those persons and their families? If we can identify and locate such individuals for the purpose of distributing rebate checks and EIC credit checks, why is that we cannot locate the same individuals in order to deport them from entering the USA unlawfully?

About Tom

Thomas F. Roeser is radio talk show host, writer, lecturer, teacher and former VP of The Quaker Oats Company of Chicago. A former John F. Kennedy Fellow, Harvard and Woodrow Wilson International Fellow, Princeton, N. J., Roeser is theauthor of the book Father Mac: The Life and Times of Ignatius D. McDermott. To read more about Tom, Click here.